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Number of e-bike commuters is still low, but we are on the eve of a serious explosion | NPM Capital

October 17, 2019
Number of e-bike commuters is still low, but we are on the eve of a serious explosion | NPM Capital

First e-bike Commuting Monitor tracks the emergence of e-bikes as a serious alternative to cars and public transport

International Bike Group (IBG), the parent company of bicycle retailers (Benelux region) and Hellorider (Scandinavia), has published the initial results of an ongoing survey the company launched in 2019 into the role of electric bicycles (e-bikes) in commuting to and from work in years to come.

While nationwide sales figures for the Netherlands in 2018 already revealed that e-bikes, with more than 400,000 units sold that year, are an unstoppable trend among consumers, this number is expected to further rise to around 550,000 in 2019. Online bicycle store reports that already two out of every three bikes they sell are electric. IBG’s e-bike Commuting Monitor mainly measures and explores the extent to which e-bikes are emerging as a serious home-to-work travel alternative to cars and various modes of public transport.

The monitor comprises an integrated survey, including an annual comprehensive market survey (initially conducted among consumers in 2019, followed by businesses from 2020 onwards) and surveys targeting (in the future) thousands of e-bike users, which will centre on user intentions. A dedicated research panel will be concerned with tracking effective e-bike usage, changes within this usage, and the factors influencing these changes. IBG is the first company to track trends in e-bike commuting in a longitudinal survey and monitors the resulting market impact.

The closer, the more popular
The first survey, which was conducted as part of the e-bike Commuting Monitor, targets Dutch people earning an income and living within a radius of between 5 and 50 kilometres from work. Only 28% of this cohort currently own an e-bike, with 14% of this group currently using it to travel to and from work. Once the commuting distance is reduced, this percentage increases significantly, to 19% (5-25km) and even to 25% (5-15 km).

The average e-bike commuter is 46 years old, and 55% of these users are female. Around 45% of e-bike owners who currently commute to work are aged 50 and over, with 25% being in the 35-50 age bracket and 30% aged between 18 and 35. The correlation between commuting distance and positive attitudes among users is noteworthy: the closer commuters live to their workplace, the more favourably they are inclined towards their chosen mode of transport (from 58% - <50km; 60% - <35km; 64% - < 25km to 69% < 15 km).

Good intentions
In the second part of the e-bike Commuting Monitor, more than two-thirds (71%) of e-bike owners who recently purchased an electric bicycle from and live within a radius of 5-50 kilometres from their workplace stated that they bought the bike primarily for commuting purposes. Once the commuting distance is reduced, this percentage spikes to 78% (5-25km) and even as high as 80% (5-15km).

According to Davy Louwers, CEO of IBG, these numbers do not necessarily confirm whether e-bikes are set to become a serious mode of transport for commuters in the future; rather, the question is when effective use of these bikes will hit the big time and e-bikes will replace cars, buses or trains altogether several days a week. “We’re about to see an exponential rise in the number of e-bike commuters. Of course, the mere intention to start using an e-bike for travel to and from work is no guarantee that owners will actually follow through on these plans in all cases. We have been monitoring effective use daily with a growing panel of e-bike owners who share their experiences with us intermittently.”

These surveys reveal that e-bike commuters describe their experiences as very positive virtually across the board. A solid 80% rave about their bike (45%: “They’re wonderful and I would recommend them to anyone”; 35%: “better than expected”; with only 3% reporting being somewhat disappointed). Once they actually start using their e-bike to travel to and from work, they are very likely to be won over permanently by this mode of transport. “We can already realistically assume that at least half of those who have purchased an e-bike and who live at a distance of between 5 and 50 kilometres from work, who stated that they bought the bike mainly with the intention of using it for commuting, will actually regularly use it for this purpose. We’re talking around 35%, which is a significant increase from the 14% we recorded in the survey,” Louwers says.

Steep retail price and little support from employers
Despite this massive popularity and growth, with more than 400,000 e-bikes sold in 2018, only 4% of Dutch people who live at a distance of between 5 and 50 kilometres from their jobs currently use an e-bike to travel to and from work. Of this 4%, a total of 70% work within a radius of up to 15 kilometres from home. Rain (62%), storm (43%) and appointments away from the office were the most frequently cited reasons for respondents not to consider using a e-bike to travel to work. The steep retail price is the largest hurdle preventing people from buying an e-bike to commute to and from work at this point, followed by a lack of financial allowances and positive incentives from employers to more regularly leave the car at home one or several days a week and cycle to work instead (using their electric or regular bike).

Employers’ most powerful incentive: the Bike to Work Scheme
Employers would appear to hold all the cards when it comes to getting their employees to use e-bikes: 58% of those surveyed stated they were amenable to the idea of riding an electric bike to work if the purchase price and other barriers were to be eliminated.

Louwers: “The new Bike to Work Scheme will be implemented nationwide on 1 January 2020, as part of which workers will pay a very low annual tax rate (7%) on the e-bike leased for them by their employer. This will provide employers with an alluring incentive for their employees: an employee benefit that offers workers both a financial allowance and an appealing form of transport. In introducing the scheme, employers are also heeding the appeal by the third Rutte government to implement measures to help scale back vehicle usage over the long term and start using their bikes more often.”

Dutch government: Promoting bicycle use
The Dutch government, headed by Prime Minister Mark Rutte (currently on his third term), published the Fietsbrief policy document in 2018. Drafted by State Secretary Stientje van Velthoven of the Ministry of Infrastructure and Water Management (whose portfolio of responsibilities includes environmental policy, public transport, railway policy and bicycle policy), the document sets out a plan for the upcoming government term to allocate a total of €100 million for the construction of dedicated bike storage racks and other facilities for electric bikes and cargo bikes (€76M) in strategic locations such as NS railway stations, and the addition of dedicated cycle lanes for e-bikes (€24M). Intent on reducing congestion, carbon emissions and particulate matter, the current government aims to take some 200,000 commuters permanently off the country’s congested roads and motorways by 2021 and increase the number of cycling kilometres by 3 billion.

Against this background and bolstered by an extra financial incentive from the Ministry of Finance when the new Bike to Work Scheme – with its low annual 7% tax rate for employees on this additional benefit – takes effect on 1 January 2020, employees can play a key role in encouraging their employees to cycle to work.

“Although the Fietsbrief policy document issued by the Ministry of Infrastructure and Water Management states that employers must implement measures to promote bicycle use among their employees, the State Secretary has confirmed that the Ministry currently has no special information campaigns or a specific communication plan in the works to raise awareness among employers of the new 7% tax incentive scheme. That’s why we’re working hard, on our end, with the major car leasing companies in the Netherlands on designing a comprehensive lease proposition to motivate businesses – particularly fleet managers – to make e-bikes part of their transport plans for 2020,” Louwers says.

Public Cost-Benefit Analysis (PBCA)
Other than the hard targets set by the current government (less than two years before the next election), there is no practicable Public Cost-Benefit Analysis (PCBA) in place for e-bikes. The current PBCA, which was released in 2012 and updated in 2017, only compares several traditional (i.e. non-electric) bicycles to other modes of transport. However, it does not address the potential implications of e-bike usage. The 2017 update states that more research is required “to assess the impact of the use of electric bicycles, including that on users’ level of physical activity, the practice of switching between various modes of transport (modal shift), travel time, and usage and travel motivations.

As IBG CEO Davy Louwers explains, this was one of the reasons that impelled his company to launch the e-bike Commuting Monitor. The insights gleaned from its research to date provide valuable information on some of the areas noted above, including modal shift, travel time and travel motivations. Yet there remains a need for exact calculations of the effective reduction in carbon emissions generated by e-bikes and their impact on congestion problems in the Netherlands if they were to become a serious alternative to driving or taking public transport to work.

“I believe the social effects combined with calculations of carbon reduction will help to steer the climate debate in the right direction, and that the public will come to realise that e-bikes are an easy way to scale back commuter traffic – one that no one, neither the government nor employers nor consumers can ignore in good conscience. In that respect, we feel electric bikes should have been more of a focal point of the [Dutch] Climate Agreement. The new tax incentive scheme is a step in the right direction, but 7% is still nearly double the rate that currently applies to fully electric vehicles (4%). In Belgium, this rate is as low as zero percent, and we’re seeing the effects it’s had over there: cycling to work is more popular there than in any other country. I am also curious to see how much money the government will allocate after the next election to investments in the supporting bicycle infrastructure, such as cycle lanes and charging facilities. We sincerely hope that the findings of the e-bike Commuting Monitor will serve as positive input for these important discussions and all the related decisions to be made going forward.”

Also read ‘LeasePlan and International Bike Group to invest big in e-bike leasing market’

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